Shopping.com Sees Broader Appeal for Online Comparison Shopping

If Shopping.com is any indication, online comparison shopping has come of age.

The San Francisco company doubled the number of unique visitors in the 2003 holiday season to 58 million and the number of shopping sessions to 69 million. Leads referred to merchants listed on the site grew 123 percent in holiday 2003 to 29 million, and sales for them rose 132 percent to $181 million.

"Consumers are growing comfortable with online shopping in general, and comparison shopping in particular, just like they accepted travel sites that offered comparative pricing some two years back," said Rob Goldman, senior vice president of business intelligence at Shopping.com, which was rebranded from DealTime Inc. in September.

Shopping.com illustrates that acceptance, as it stood fourth among U.S. multi-category e-commerce sites for November in terms of unique monthly visitors, according to Nielsen//NetRatings, trailing only eBay, Amazon and Yahoo Shopping. Walmart.com, target.com and BizRate.com followed.

Among comparison-shopping services and portals, Shopping.com was second after Yahoo Shopping. Its unique audience grew 24.1 percent to 14.9 million visitors from 12.02 million in the previous month.

Not far behind in growth, Yahoo Shopping and MSN Shopping, first- and third-largest shopping sites, grew 15.2 percent in the same period to 19.46 million and 7.03 million unique visitors, respectively.

"We believe the slower ramp in our space reflects consumers' pre-existing comfort with the earlier offline analog in travel, the travel agent," Goldman said. "Very few people have ever had or used a shopping agent, so we faced a steeper climb into the mainstream consciousness and culture.

"Now, five years down the road, we're seeing a rapid uptick of consumer awareness, interest and acceptance. In a sense, we've hit the tipping point, or critical mass. Major branded merchants have seen the market mature and are now interested in selling online."

Comparison shopping also is helped by ratings and reviews on smaller merchants on sites like Shopping.com and its rivals.

Analyzing user behavior, online shoppers seem to prefer a mix of rating, reputation, price and value. Price is important, but is part of a larger picture. And merchant size does not matter as much as its rating and reputation. But one exception to that trend is apparel.

"We're not yet seeing this dynamic at play in the apparel market," Goldman said. "In apparel, brand is still king, and we still see a disproportionate conversion-to-sale for big-brand clothiers on our site."

Another shift is the growing importance of the woman shopper. Women now are 52 percent of the site's traffic. They use comparison-shopping services to buy items ranging from baby products and jeans to garden hoses and microwave ovens.

In fact, Shopping.com now lists more products in its home and garden category than it does in consumer electronics. Apparel is its fastest-growing category.

"The largest and most important trend this season, and [for 2003] as a whole, is the shift to the soft categories of home and garden and furniture," Goldman said.

"It's been a landslide ... and it shows no sign of stopping. Online shopping sites are no longer marketplaces of technical equipment for technical people. We've attracted and are repeatedly serving a much broader audience and general merchandise category mix."

Shopping.com this year aims to make its site faster and easier for consumers to find, compare and buy products. On a granular level, it looks to make it easier to find unstructured items -- products without a model number, like furniture or apparel -- within its product catalog.

"For instance, we have 451,000 items in furniture, and there are no standardized model numbers therein," Goldman said. "We don't want to ask shoppers to winnow and refine their search repeatedly before finding them a polka-dotted red bean-bag chair. We want to simply deliver the right result immediately."

Measurement is another concept that is more understood than implemented. Goldman has seen that many retailers selling online still lack the tools to track, measure and optimize shoppers' behavior, activity and satisfaction.

Shopping.com even offers a free ROI Tracker to help retailers improve in-search capability and analysis to prepare for the wave it sees building this year.

"We'll see the continued shift to general merchandise and soft goods online, down to even the smallest accessories, which, given the economics of paid search and pay-for-performance marketing, it is presently a challenge to sell profitably online," Goldman said.

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